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Commercial property investment in the north falls to five-year low

COMMERCIAL property investment in the north fell to its lowest level since 2013 last year, according to a new industry report.

The latest Lambert Smith Hampton bulletin shows that the £176.6 million investment volume recorded in 2018 was 48 per cent lower than the previous year and 12 per cent down on the 10-year average.

After a slow start to the year, the quarterly activity exceeded £50m for the remainder of 2018, boosted by the beleaguered retail sector.

Retail transactions accounted for almost half of the activity in 2018, with notable deals including the Belfast sale of 40-46 Donegall Place for £16.4m, the acquisition of Bow Street Mall in Lisburn for £12.3m and the purchase of the Newtownards-based Castlebawn Retail Park for £7.2m.

Office activity also picked up in the second half of the year, largely driven by two Belfast deals – the sale of the Metro Building for £21.8m and the £15.2m purchase of Obel 68.

There was further positivity noted within the alternative sector, with car parks, car showrooms, gyms and hotels among the assets that changed hands in 2018.

Private Northern Ireland investors remain the most active and accounted for a third of investment volume last year, while institutional activity increased from 11 percent of volume in 2017 to 21 percent last year.

Notable institutional transactions included CBRE Global Investors £18.4m purchase of the NCP Car Park on Montgomery Street in Belfast and Corum Asset Management’s purchase of 40-46 Donegall Place.

Martin McCloy, director of capital markets at Lambert Smith Hampton, admitted that the ongoing political uncertainty has impacted on the local market.

“ The challenging political environment has undoubtedly had a negative effect on investment activity over the past two years, with 2017 boosted by the £123m sale of CastleCourt Shopping Centre,” he said.

“While overall the market has demonstrated a level of resilience, there is a lack of supply of good quality assets and investor caution is evident.”

Looking at the year ahead, Mr McCloy said the trend of a quiet first quarter is likely to be exacerbated by the upcoming March 29 Brexit deadline.

“Both buyers and sellers are delaying decisions until there is clarity on the withdrawal agreement or on no agreement, as the case may be.”

“Investment activity is expected to pick up when the terms of the future relationship are clearer and the transition period begins,” he added.

Source: Irish News

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Commercial property investment ‘subdued’ in third quarter says report

COMMERCIAL property investment in the third quarter of 2018 remained ‘subdued’ in Northern Ireland, with volume recorded at £53.2m, according to Lambert Smith Hampton’s latest regional investment transactions report.

The ITNI Bulletin reports that year-to-date total investment volume stands at £121m, a decrease of 52 percent on the same period in 2017.

And while investor appetite has improved, Q3 activity overall remained low at 38 percent below the five-year quarterly average.

On the upside, the latest quarter did see the first office investments of 2018.

With a combined value of £39.4m, three assets changed hands in Belfast city centre, accounting for 74 percent of the quarterly volume.

These included the Metro Building for £21.8m (a yield of 5.75 per cent), Obel 68 for £15.2m (yield 6.73 per cent) and 20 Adelaide Street for £2.4m (yield 7.2 per cent).

The two largest deals of the quarter were by a local property company and Belfast Harbour Commissioners.

Private Northern Irish investors were very active, and this group is responsible for the largest proportion of investment volume in the year-to-date.

Martin McCloy, director of capital markets at Lambert Smith Hampton, said: “Although subdued in comparison to recent years, investment has remained resilient in the face of the political and economic headwinds of the last two years.

“We anticipate that quarter four will follow the same trend as the two previous quarters, with £20m of deals currently agreed or in legals.

“Investor appetite remains and investors are taking advantage where clear value can be found with quality assets quickly being agreed.”

He added: “The uncertainty continues regarding the exact detail of the withdrawal and future relationship agreements between the UK and EU.

“A blueprint for the future trade and security partnership should further increase confidence amongst investors and the commercial property market.”

Source: Irish News